Introduction to cryptography for beginners
A new form of currency system that is secured and issued in a completely different method than conventional money was introduced to the world in 2009 when the Bitcoin protocol went online.
Fiat currencies, such as the US dollar or the yen issued by each nation's central bank, are supported by confidence in the established banking system. Every home government determines its own flexible monetary policy, which determines how any new money enters circulation. Fiat currencies are, in a way, supported by faith in the strength of each nation's economy and its armed forces.
On the other hand, all cryptocurrencies that were developed after the creation of Bitcoin are secured and produced utilising the scientific discipline known as "cryptography."
In the end, Bitcoin relies on a predefined, computer-controlled monetary policy that cannot be altered by any one person, business, or government. Users of Bitcoin put their faith in the transparent set of rules and cryptography that allow it to run consistently regardless of market price or sentiment, rather than in the government or other institutions.
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| Crypto Currency |
What is cryptography ?
The study of information encryption and decryption is known as cryptography. It involves changing a communication such that only the sender and intended recipient or recipients can interpret it, to put it briefly.
Cryptography would make it nearly impossible for someone who intercepted an encrypted message but wasn't the intended recipient to decipher the information it contained.
One of the oldest instances of cryptography can be found in the 7th century B.C., when the Greeks used a technique called scytale to encrypt messages inscribed on leather strips that were wound around sticks. The leather strip would have letters scrawled along it once it was unwound that only someone with an identical stick with an equivalent diameter could read.
Cryptography has been essential in safeguarding communications that could be intercepted between dispersed armies during times of conflict. Deciphering Enigma cypher machine-encrypted Nazi radio signals during World War II was crucial in putting an end to the invasion of Europe.
When it comes to the security and issuance of cryptocurrencies like bitcoin today, encryption is essential.
- A crucial element of cryptocurrencies is cryptography, which is used to: Generate crypto wallet key pairs
- New bitcoins are released via the mining process.
- Sign transaction messages digitally
Which cryptography is employed by Bitcoin?
making public and private keys
The Secure Hash Algorithm 256 (SHA-256) and elliptic curve cryptography (ECC) are both used by Bitcoin to create public keys from corresponding private keys.
The private key is required to sign transactions and demonstrate ownership of funds, while the public key is used to create a crypto wallet address for receiving incoming transactions.
The public key can be compared to your bank account number, and the private key to your PIN number. Both are necessary for a hacker to harm your finances.
The most important piece of the key pair is the private key, which is kept in a cryptocurrency wallet. Technically, a person's access to their cryptocurrency funds, not the actual coin itself, is stored in a crypto wallet. The actual monies are just data entries that are stored on the blockchain and may be identified and unlocked by utilising the wallet-stored keys.
Elliptic-curve encryption
ECC is the application of a unique, horizontally symmetrical mathematical curve. Any line that is drawn through this curve will, at most, intersect it three times. An essential component of cryptocurrencies, ECC enables users to create a public key.
You must first produce a private key in order to construct a Bitcoin key pair.
A randomly generated 256-bit value (between 1 and 2^256, or two to the power of two hundred and fifty six, an astronomically high number!) serves as a bitcoin private key. This number is generated automatically when creating a new cryptocurrency wallet on platforms like Kraken.
Then, using elliptic curve multiplication, this number is used to produce the public key. In order to create a new point on the curve, a starting point on an elliptic curve (also referred to as a generator point) is multiplied by the random private key number.
This new point, with its unique x and y coordinates, becomes the public key. Given the difficulty of guessing a random 256-bit value, it is nearly impossible to find the private key while knowing the public key. The probability of getting it right is roughly one in 150,000 trillion billion trillion billion trillion billion trillion.
Theoretically, to find this number in a day would require a quantum computer with more than 13,000,000 actual qubits. Only 127 qubits—or 0.00097% of the necessary qubits—are currently present in the IBM Eagle processor, one of the most cutting-edge quantum computers in existence.
In other words, the technologies that underpin cryptocurrencies are 100 percent secure, at least for the time being.
SHA-256
The SHA-256 algorithm is used to the x and y coordinates to get a bitcoin wallet address.
The National Security Agency (NSA) of the United States created and released this cryptographic hash function in 2001. It simply converts any input (in this case, the public key coordinates) into a distinct, fixed-length 256 bit code.
This code is presented in 64-character hexadecimal format and consists primarily of the letters A-F and the numbers 0 to 9.
Cryptographic "trapdoor" or "deterministic" functions include SHA-256 and ECC. As a result, they can only operate in one direction and cannot be turned around to show the original inputs.
A private key can be used to generate a public key, but the procedure cannot be reversed to reveal the secret key. Finding out which public key was used to generate a bitcoin wallet address is similar. The only person who has access to that data and can use it to demonstrate ownership of the bitcoin wallet address is the public key holder.
Do you need a better explanation of this? Imagine combining a range of variously coloured paints from a selection of, as we previously mentioned, 150,000 billion billion billion billion billion choices to produce a single distinctive colour.
You could duplicate any colour if you knew the precise ratios of the appropriate pigments. What if you didn't, though? Reversing the process would be extremely difficult.
This is the basic operation of these trapdoor cryptographic functions, which makes it possible for their inputs to be indistinguishable from the result.
Why is cryptography relevant?
Cryptography is crucial for protecting cryptocurrency networks from fraud and giving users with an uncontestable way to prove ownership of funds without having to reveal their private key information.
Without it, cryptocurrency networks would likely be compelled to rely on reliable, centralised intermediaries to secure their data and conduct payments, which is utterly at odds with the decentralised nature of public blockchain-based cryptocurrencies.
Now that you are familiar with the technology underlying cryptocurrencies, it is time to begin using the most reputable and open exchange for digital assets.
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